BILL NUMBER: AB 761	CHAPTERED  08/24/99

	CHAPTER   226
	FILED WITH SECRETARY OF STATE   AUGUST 24, 1999
	APPROVED BY GOVERNOR   AUGUST 23, 1999
	PASSED THE ASSEMBLY   AUGUST 16, 1999
	PASSED THE SENATE   JULY 15, 1999
	AMENDED IN SENATE   JUNE 9, 1999
	AMENDED IN ASSEMBLY   MAY 28, 1999
	AMENDED IN ASSEMBLY   APRIL 27, 1999
	AMENDED IN ASSEMBLY   APRIL 15, 1999

INTRODUCED BY   Assembly Member Briggs
   (Coauthor:  Assembly Member Cardoza)
   (Coauthor:  Senator Costa)

                        FEBRUARY 24, 1999

   An act to add Section 14085.9 to the Welfare and Institutions
Code, relating to health, and making an appropriation therefor.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 761, Briggs.  Medi-Cal:  disproportionate share providers.
   Existing law provides for the Medi-Cal program, which is
administered by the State Department of Health Services, pursuant to
which medical benefits are provided to public assistance recipients
and certain other low-income persons.
   Under existing law, the State Department of Health Services is
required to make supplemental payments to certain outpatient
disproportionate share hospitals based on specified criteria.
   Under existing law, each hospital contracting to provide services
under the Medi-Cal program pursuant to a selective provider contract
that meets the criteria contained in the state medicaid plan for
disproportionate share hospital status is eligible to negotiate with
the commission for distributions from the Emergency Services and
Supplemental Payments Fund.
   This bill would create the continuously appropriated Small and
Rural Hospital Supplemental Payments Fund, from which distributions
may also be made in accordance with provisions similar to those
governing the Emergency Services and Supplemental Payment Fund.
   Appropriation:  yes.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Section 14085.9 is added to the Welfare and
Institutions Code, to read:
   14085.9.  (a) Except as provided in subdivision (g), each hospital
contracting to provide services under this article that meets the
criteria contained in the state medicaid plan for disproportionate
share hospital status shall be eligible to negotiate with the
commission for distributions from the Small and Rural Hospital
Supplemental Payments Fund, which is hereby created and,
notwithstanding Section 13340 of the Government Code, is continuously
appropriated for the purposes specified in this section. All
distributions from the fund shall be pursuant to this section.
   (b) (1) To the extent permitted by federal law, the department
shall administer the fund in accordance with this section.
   (2) The money in this fund shall be available for expenditure by
the department for the purposes of this section, subject to approval
through the regular budget process.
   (c) The fund shall include all of the following:
   (1) Subject to subdivision (l), all public funds transferred by
public agencies to the department for deposit in the fund, as
permitted under Section 433.51 of Title 42 of the Code of Federal
Regulations or any other applicable federal medicaid laws.  These
transfers shall constitute local government financial participation
in Medi-Cal as permitted under Section 1902(a)(2) of the Social
Security Act (Title 42 U.S.C. Sec. 1396a(a)(2)) and other applicable
federal medicaid laws.
   (2) Subject to subdivision (l), all private donated funds
transferred by private individuals or entities for deposit in the
fund as permitted under applicable federal medicaid laws.
   (3) Any amounts appropriated to the fund by the Legislature.
   (4) Interest that accrues on amounts in the fund.
   (d) Amounts in the fund shall be used as the source for the
nonfederal share of payments to hospitals under this section.  Moneys
shall be allocated from the fund by the department and matched by
federal funds in accordance with customary Medi-Cal accounting
procedures for purposes of payments under this section.
   (e) Distributions from the fund shall be supplemental to any and
all other amounts that hospitals would have received under the
contracting program, and under the state medicaid plan, including
contract rate increases and supplemental payments and payment
adjustments under distribution programs relating to disproportionate
share hospitals.
   (f) Distributions from the fund shall not serve as the state's
payment adjustment program under Section 1923 of the Social Security
Act (42 U.S.C. Sec. 1396r-4).  To the extent permitted by federal
law, and except as otherwise provided in this section, distributions
from the fund shall not be subject to requirements contained in or
related to Section 1923 of the Social Security Act (42 U.S.C. Sec.
1396r-4).  Distributions from the fund shall be supplemental contract
payments and may be structured on any federally permissible basis,
as negotiated between the commission and the hospital.
   (g) In order to qualify for distributions from the fund, a
hospital shall meet all of the following criteria:
   (1) Be a contracting hospital under this article.
   (2) Satisfy the state medicaid plan criteria referred to in
subdivision (a).
   (3) Be a small and rural hospital as defined in Section 124840 of
the Health and Safety Code.
   (4) Be a licensed provider of standby emergency services as
described in Section 70649 and following of Title 22 of the
California Code of Regulations.
   (5) Be able to demonstrate a purpose for additional funding under
the selective provider contracting program with proposals relating to
health care services that are made available, or will be made
available, to Medi-Cal beneficiaries.
   (6) Be determined by the California Medical Assistance Commission
to be a hospital that provides an important community service that
otherwise would not be provided in the community.
   (h) (1) The department shall seek federal financial participation
for expenditures made from the fund to the full extent permitted by
federal law.
   (2) The department shall promptly seek any necessary federal
approvals regarding this section.
   (i) Any funds remaining in the fund at the end of a fiscal year
shall be carried forward for use in following fiscal years.
   (j) For purposes of this section, "fund" means the Small and Rural
Hospital Supplemental Payments Fund.
   (k) (1) Any public agency transferring amounts to the fund, as
specified in paragraph (1) of subdivision (c), may for that purpose,
utilize any revenues, grants, or allocations received from the state
for health care programs or purposes, unless otherwise prohibited by
law.  A public agency may also utilize its general funds or any other
public funds or revenues for purposes of transfers to the fund,
unless otherwise prohibited by law.
   (2) Notwithstanding paragraph (1), a public agency may transfer to
the fund only those moneys that have a source that will qualify for
federal financial participation under the provisions of the Medicaid
Voluntary Contribution and Provider-Specific Tax Amendments of 1991
(P.L. 102-234) or other applicable federal medicaid laws.
   (l) Public funds transferred pursuant to paragraph (1) of
subdivision (c), and private donated funds transferred pursuant to
paragraph (2) of subdivision (c), shall be deposited into the fund,
and expended pursuant to this section.  The director may accept only
those funds that are certified by the transferring entity as
qualifying for federal financial participation under the terms of the
Medicaid Voluntary Contributions and Provider-Specific Tax
Amendments of 1991 (P.L. 102-234) and may return any funds
transferred in error.
   (m) The department may adopt emergency regulations for the
purposes of this section.
   (n) The state shall be held harmless from any federal disallowance
resulting from this section.  A hospital receiving supplemental
reimbursement pursuant to this section shall be liable for any
reduced federal financial participation resulting from the
implementation of this section with respect to that hospital.  The
state may recoup that federal disallowance from the hospital in any
manner authorized by law or contract.
